Buying an underpinned house

bandagedtrunk

So I found my dream home, cottage in country

On the market 2 weeks for 245k way better than anything else I'd seen in that price range lots of interest. I was advised that I was in the ballpark with 237, we're now in negotiation

I then was also advised that the property had been underpinned in 1997 due to clay related heave and features a crack in the wall. I asked the EA and they said they didn't know about underpinning until I'd put in my offer. :cool:

I confirmed with EA that they did valuation and therefore didn't value with underpinning in mind

The vendor seemed to have no problem getting insurance (about 500 pa on buy to let basis (house currently tenanted)) when he bought back in 2002

Thing is, there's no paperwork regarding the original work as the previous owners didn't keep it.

I understand that any legit works get registered with the council, is this correct and can I use this avenue to get details of the work done?

I've also asked that the seller pay for a structural engineers report to check the property hasn't moved and to pay 50% towards the cost of a full buildings survey. If this says that he property has been overvalued then I'm going to renegotiate or walk.

Is there any additional useful advice that anyone on this forum could give in regards to getting adequate assurance and peace of mind when buying an underpinned property without original paperwork. Also any views on how value is affected.

I'm not completely risk averse but if the overwhelming majority says walk then I'll have to take that seriously

Very grateful for any help - negotiations still underway

Thanks

missindecisive

if you log on to your local councils website and look under planning you should be able to locate the property by its address. then you can look up any associated documents under building control. There should be something there to say that the work has been completed.
personally I would walk away...

LandyAndy

missindecisive wrote: »

if you log on to your local councils website and look under planning you should be able to locate the property by its address. then you can look up any associated documents under building control. There should be something there to say that the work has been completed.
personally I would walk away...

As would a lot of people, including me. And that is why. Lots of people will walk away and it could prove much more difficult to sell in the future.

zzzLazyDaisy

I would walk away too. Underpinning is carried out by the insurer, who will continue to insure the property, but you can bet your sweet life that no other insurer will touch it. Which leaves you tied into the original insurer, with little opportunity to switch and at the mercy of rising premiums (well they have to get back their outlay somehow). When you come to sell, your pool of buyers will be considerably diminished as most will walk away, and those who are not frightened off will want a significant reduction in the house price.

Before you go any further, I suggest that you go onto a comparison website and check out the cost of insurance for this house - with underpinning and without.

bandagedtrunk

I've just spoken to Legal and general who've said they'll insure it if the subsidence and work is over 15 years ago. Its 15 years and 2 months :T now. Works out at 270 p.a.

Appreciate the walk away comments, I'm assuming this is about future saleabilty.

So if it can be insured cheaply and thereby satisfy my lender, and full on surveys give it the all clear, and the valuation is realistic or negotiable down, would people still walk away and if so, why?

Thanks

ruggedtoast

bandagedtrunk wrote: »

I've just spoken to Legal and general who've said they'll insure it if the subsidence and work is over 15 years ago. Its 15 years and 2 months :T now. Works out at 270 p.a.

Appreciate the walk away comments, I'm assuming this is about future saleabilty.

So if it can be insured cheaply and thereby satisfy my lender, and full on surveys give it the all clear, and the valuation is realistic or negotiable down, would people still walk away and if so, why?

Thanks

How long is a piece of string? It depends on how much you want the house, what your risk criteria are, how much it costs, what comparable properties are like, how important resale is to you, whether you think its going to start moving again.

I probably wouldnt buy such a house unless it was a low price and I didnt expect to have to sell again soon, or in a hurry, but then if it was a great bargain and I really wanted to live there maybe I would.

cramg

The previous vendors did not keep the paperwork relating to the underpinning? Well, after all it is only a house worth circa £250,000 so why keep such important documents........... Serious alarm bells here!

FYI, we viewed a house 2 weeks ago and the EA initially told us that the detached garage had one corner of the wall underpinned last year. The vendor had the engineers report with drawings, the building inspectors report, the insurance company report and the building sign off certificate and passed all documents to us on request.
I spoke with 4 insurance companies who declined to insure such property with underpinning and my IFA liaised with 3 mortgage lenders who all advised that their criteria would not lend against such property. This was with all documents present as well and it was only a section of the garage that had been underpinned....

Personally, with the 'big file of documents' relating to the underpinning not being present, i'd walk away asap!

Sponge

It was 15 years ago. Surely if there was an ongoing problem it would have reared its ugly head by now?

I'm in the process of renewing my home insurance and all of the companies I've tried have asked about underpinning, etc, that has occured within the last 10 or 15 years. If they don't think there's a risk with work carried out that long ago, how much weight should you place on it?

ruggedtoast

Its not the risk of recurrence its the difficulties selling and insuring. I tried to get plenty of quotes from high street insurers who wouldnt accept any underpinning ever before pulling out of similar purchase.

bandagedtrunk

I've checked and double checked with L&G, I have it in writing ie
"

As long as the underpinning works were completed more than 15 years ago and there has been no further structural movement then we can offer cover under our normal terms."

After 15 years, is it any more likely to move than a non underpinned property? Less so perhaps? And if it does, surely it's covered as per L&G

My lender told me on the phone that if it's insured, they're ok about the underpinning.

I can be talked out of this but I'm sensing a general unease at the words underpinning and paperwork rather than what that tangibly translates into in my particular case

I'm assuming that any future buying unease will be reflected in my buildings survey valuation (which takes into account several factors including marketability) so is that not covered?

Worth the cost of a survey/valuation?

zzzLazyDaisy

No-one wishes to talk you out of this purchase. If it is right for you, and you have insurance and mortgage in place, then go for it.

However you canvassed opinions and the consensus is that most people would walk away. This will almost certainly also be reflected by potential buyers when you come to sell, which will reduce the pool of buyers and therefore the saleability and probably the value of your house.

It is not about logic or convincing people of your views, it is about buyer perception.

If you don't plan to move again any time soon, this may not matter to you.